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Years ago in London I met a man who worked for an auction house. He had something to tell me. Over steak sandwiches in a pub in the West End he unfolded a real-life detective story about the greatest prize in sport: the original football World Cup, the Jules Rimet trophy.

People think it was stolen in Brazil in 1983 and melted down into gold bars. But according to my friend, the trophy was still alive and well and had recently been sold in London.

The French football official Jules Rimet commissioned the trophy from the French sculptor Abel Lafleur for the first World Cup in 1930. It was a magnificent piece: a solid gold 15in statuette of Nike, then still known as the Greek goddess of victory. My friend the auctioneer’s story began in March 1966, when Nike was stolen from a stamp exhibition in London.

At the time, England was preparing to host the 1966 World Cup. The theft made the English Football Association (FA) look stupid worldwide. But on the night of Sunday March 27, 1966, a dog named Pickles unearthed the stolen trophy under some bushes in south London. Pickles became a national hero.

After the cup was returned, the FA gave it for safekeeping to its regular jeweller, George Bird. Martin Atherton, a lecturer at the University of Central Lancashire who has brilliantly tracked the trophy’s travails, describes how in the months before the World Cup Bird would cycle the trophy around London from exhibition to exhibition. The Jules Rimet sat in his bicycle basket, concealed only by a cloth.

Eventually Bird decided that this wasn’t safe. He suggested to the FA that he make a replica of the trophy: safer to exhibit this than the real thing. Atherton describes what happened next. The FA asked Fifa, the international football authority, for permission to produce a replica. Fifa said no. But the FA secretly commissioned Bird anyway. He made a gilded bronze trophy – probably for nothing, as a gift to the FA. Now there were two Jules Rimet trophies: the real one and the replica, identical to the layman’s eye.

On Saturday July 30, 1966, three policemen drove to Wembley for the World Cup final between England and West Germany. In the car with them were both Jules Rimet trophies. After England beat the Germans 4-2, Queen Elizabeth handed the English captain Bobby Moore the real trophy. Later, England’s midfielder Nobby Stiles performed his famous jig on the pitch with it. Then, however, the policemen wrested the cup from Stiles and gave him the replica instead. The British authorities wanted to keep the real trophy safe. That evening, on the balcony of the Royal Garden Hotel in Kensington, the English players waved the replica to the crowds. Nobody noticed the difference.

In 1970 came the next World Cup, in Mexico. Now the FA had to return the trophy to Fifa. But which trophy? There were two. And so, my friend the auctioneer said, “They gave back the replica.”

In Mexico, Brazil won its third World Cup and was allowed to keep the Jules Rimet trophy forever. A very different cup was sculpted to replace it. In 1983 the Jules Rimet was stolen from the Brazilian FA’s headquarters. Police believe it was melted down into gold bars. “But the stolen trophy wasn’t the real one,” said my friend. “It was the replica.” One of the two Jules Rimet trophies had stayed in London after 1970, hidden under Bird’s bed. Atherton explains: “It officially did not exist and so could not be put on open display.” Sometimes Bird’s grandchildren played with it. Twice his house was burgled, and twice the thieves missed the cup.

Bird died in 1995. Two years later, his family auctioned his trophy. “Replica”, states the Sotheby’s catalogue for the sale. “Reserve price £20,000-£30,000.” That seemed a lot to ask for a bronze artefact with a scrap metal value of perhaps £1,500.

But it sold for £254,500. This was nine times the highest price ever previously paid at auction for a piece of football memorabilia. Bird’s family was so astonished they walked out of the auction during the bidding. “It’s an absurd price,” my friend told me. “Unless you know it’s the real trophy. And the winning bidder knew.”

The winning bidder was Fifa itself. One of the rival bidders was probably the Brazilian FA. Fifa had bid because it had heard the story of the switch: the story that the real cup had remained in England in 1970. “Fifa took the decision to buy this trophy as it was thought to be the original one,” Fifa confirmed to me last week. But even Fifa wasn’t sure whether the trophy at auction was indeed the real golden cup, or merely the bronze replica. Fifa couldn’t have ascertained this at the viewing days before the sale, a jewellery specialist at a leading auction house told me, because it’s not done to turn up at viewing days with testing equipment to check whether an object is solid gold. Fifa’s purchase of the cup was a gamble.

Immediately after buying the trophy it had an expert examine it. You can imagine the scene: a backroom, a couple of football officials, a jeweller with an eyeglass and the trophy. And then the jeweller must have broken the news: the trophy wasn’t the real World Cup, but a cheap gilded bronze replica.

Both my friend the auctioneer and Fifa had been wrong: the switch never happened. Expecting to snag the real Jules Rimet, Fifa had blown £254,500 on a fake. It has since lent the thing to Britain’s National Football Museum in Preston, in north-west England.

One question remains: Where is the real Jules Rimet trophy? Was it really melted down into gold bars, or is it now hidden away under some Latin American bed?